On April. 13, 2025, the Mantra (OM) token faced a significant and dramatic dip of over 90% in value in less than an hour. As per the data on TradingView, the native token of Mantra, a security first RWA Layer 1 blockchain, dipped from $6.3 to $0.5. The price drop also caused the token’s market capitalization to drop by more than $5.6 billion. 

The shockwave from the crash subsequently spread fear through the entire crypto market. Many market observers linked the crash to Terra LUNA’s collapse that happened in 2022. OM’s massive crash in just hours has demonstrated the increasing risks associated with centralized crypto projects. 

What Triggered the OM Token Crash?

OM’s token dip started as a wallet associated with Mantra made a transfer of 3.9 million OM tokens to the OKX exchange. Blockchain analytics confirmed that the wallet is owned by @LaserDigital_, a firm that holds OM tokens originating from GSR. GSR is a major market-making firm hence the transfer initiated large-scale sell-off concerns. 

Furthermore, the fact that the MANTRA team controls 90% of all existing OM tokens, heightened investor concerns. Such insider control worried market participants as these insiders could impact the price of the OM tokens instantly. Because of this, investors interpreted the token transfer as a sign of impending dumping activities. 

What followed next was massive sell-offs that left OM’s price crashing within minutes. Stop loss-orders as investors rushed to cut losses and forced liquidations further heightened the price drop. 

Additionally, rumors of up to 50% discounted over-the-counter (OTC) token sales added more fuel to the fire. While all this happened, the project’s official Telegram remained locked, leaving investors stranded. 

Key Red Flags Prior to the Mantra Token Crash

According to reports, public mistrust existed even before the OM token crash happened. Per se,’ the development team disabled half of eligible wallets that could participate in the recent airdrop without providing any clarification. Some of the users pointed out that their digital wallets were mistakenly marked as bots, although no clarification was provided by the Mantra team. 

Additionally, the project encountered community concerns about secretive tokenomics adjustments as well as frequent delay of airdrops. Allegations of using market-makers to ensure artificial price support had also emerged prior to the crash.

Mantra’s Response and Industry Reactions

Unlike Bybit’s crisis management which was echoed by the crypto community, how the Mantra team handled the OM token crash has received criticism. Notably, pseudonymous analyst “arndxt” posted on X that “the mantra team response during peak crisis isn’t the most professional to say the least as compared to @Bybit_Official’s hack but they were quick to respond,” 

In response to the incident, Mantra co-founder John Patrick Mullin declared that his team did not take part. Rather, the co-founder blamed centralized exchanges for causing the massive price drop though forced liquidations. 

“We have determined that the OM market movements were triggered by reckless forced closures initiated by centralized exchanges on OM account holders. The timing and depth of the crash suggest that a very sudden closure of account positions was initiated without sufficient warning or notice,” Mullin wrote on X. 

Additionally, Binance declared that the market crash occurred as a result of cross-exchange liquidations. The exchange also mentioned that it had deployed risk management systems in October and simultaneously lowered leverage levels for OM tokens. However, Binance confirmed that the OM token tokenomics had changed over the last few months. But, users had been alerted of the changes via platform pop-up messages. 

“Since January this year, Binance has also issued a pop-up warning for $OM on its spot trading page to inform users that the token has undergone significant changes to its tokenomics increasing its supply,” Binance’s report read. 

Key Takeaways and Risks Identified

The OM incident has exposed essential risks that affect cryptocurrency investors. Notably, the three main issues identified include high centralization of token supply, limited transparency and undisclosed tokenomics changes. These conditions create more opportunities for manipulation and often lead to an unexpected market crash.

Crypto investors must review the token distribution to ensure that they keep off projects that have excessive internal control. Users must also conduct thorough research and utilize wallet tracking tools to watch out for large token movements. 

While the Mantra incident might not be insider induced, the post-incident updates from Mantra have failed to heal the bleeding investor confidence. One investor pseudonymously know as “JB” lamented through a post on X stating;

“In a niche that’s meant to bring trust and transparency through real world application, it’s disappointing that the biggest players can’t even be trusted…Had I known that my investment would be used to subsidize insiders instead of advancing the RWA ecosystem, I never would’ve engaged with this project.”

As more details come up, the crypto sector will continue to follow closely. Blockchain analytic institutions and platforms are working to investigate the incident further. It is also crucial for investors to follow preventative security measures.